The Basics: What IS an estate?
We encounter a lot of misunderstandings and misinformation in our practice. One of the most frequent is also the most basic: What is your “estate”? If you’re not a billionaire real estate mogul or an heiress to a hotel fortune or Rich Uncle Pennybags (aka "Monopoly Man"), do you even have an estate?
True or False: An "Estate" is a massive home and surrounding land owned by someone with a name like Lord Rupert Daintywhistle IV. Answer: False.
True or False: An "Estate" is an inheritance, especially if it's "a lot." Answer: False.
True or False: An "Estate" is the value of my assets, if any, that are subject to "death taxes." Answer: False.
We run into a lot of people that think “estate” means a large house, probably with servants, atop rolling hills. Since they don’t have that, these folks think they must not have an "estate" and therefore must not need to do "estate planning."
(Just to be crystal clear: An estate certainly CAN include large houses and rolling hills and inheritance and all the rest. But that's not what an estate IS.)
While some people use the word “estate” to refer to manor-like residences, in the legal sense, “estate” simply means:
Your "stuff" - bank accounts, retirement, house, photo albums, social media presence, grandma's ceramic bunny, etc
Your body - in particular, who gets to make decisions about your body during incapacity or death (like medical decisions, or "pulling the plug," or memorial issues like burial and cremation).
Your values and beliefs - the things that are most important to you, and how you want to provide for your loved ones, and avoiding unnecessary costs and delays like guardianship or probate.
We may not all have a mansion or a ceramic bunny, but we do all have stuff, bodies, and values. In other words, EVERYONE HAS AN ESTATE.
So, everyone needs to a plan for questions like:
If you are incapacitated or when you die, who is (and who isn't?) going to take care of your estate - your stuff, your body, your values?
How are they going to take care of your estate?
If you’re married you may say, my spouse. But what if you’re both incapacitated or gone? Now what happens? Do you and your spouse agree on what happens? Do you agree about who does what (and who doesn't)?
How do the people you leave behind know who you want to do what with what?
How may questions should those you leave behind have to answer for you?
How much should it cost them?
How much time should it take?
And once your assets transfer to them, are those assets protected or are they exposed to bad luck and bad choices that are inconsistent with your values?
The Oklahoma legislature has come up with its best guess for people without a plan, a one-size fits all estate plan embedded in statute. Have you ever tried on a one-size-fits-all garment? If it’s anything other than a scarf, it’s too big here, too small there – not quite right, or sometimes, really wrong.
ANOTHER POP QUIZ
True or False: You have an Estate.
True or False: The government has a one-size-fits-all plan for you if you don't make a plan for yourself.
True of False: You and your family are gonna love the government's plan for your Estate.
Answer: Lol. No.